Economy

Crewleader

(17,005 posts) Mon Sep 22, 2014, 09:37 PM Sep 2014

The Gold Riggers

September 22, 201

Distorting Perceptions of Economic Reality

The Gold Riggers

by PAUL CRAIG ROBERTS and DAVE KRANZLER

The Federal Reserve and its bullion bank agents (JP Morgan, Scotia, and HSBC) have been using naked short-selling to drive down the price of gold since September 2011. The latest containment effort began in mid-July of this year, after gold had moved higher in price from the beginning of June and was threatening to take out key technical levels, which would have triggered a flood of buying from hedge funds.

The Fed and its agents rig the gold price in the New York Comex futures (paper gold) market. The bullion banks have the ability to print an unlimited supply of gold contracts which are sold in large volumes at times when Comex activity is light.

Generally, on the other side of the trade the buyers of contracts are large hedge funds and other speculators, who use the contracts to speculate on the direction of the gold price. The hedge funds and speculators have no interest in acquiring physical gold and settle their bets in cash, which makes it possible for the bullion banks to sell claims to gold that they cannot back with physical metal. Contracts sold without underlying gold to back them are called “uncovered contracts” or “naked shorts.” It is illegal to engage in naked shorting in the stock and bond markets, but it is permitted in the gold futures market.

The fact that the price of gold is determined in a futures market in which paper claims to gold are traded merely to speculate on price means that the Fed and its bank agents can suppress the price of gold even though demand for physical gold is rising. If there were strict requirements that gold shorts could not be naked and had to be backed by the seller’s possession of physical gold represented by the futures contract, the Federal Reserve and its agents would be unable to control the price of gold, and the gold price would be much higher than it is now.

http://www.counterpunch.org/2014/09/22/the-gold-riggers/

4 replies

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The Gold Riggers (Original Post) Crewleader Sep 2014 OP

The way I understand the naked short sell, you would have had to actually counterfeit paper shares brewens Sep 2014 #1

Ms. Yellen has me worried. westerebus Sep 2014 #2

Hi westerebus Crewleader Sep 2014 #3

good morning.. westerebus Sep 2014 #4

brewens

(13,595 posts)

1. The way I understand the naked short sell, you would have had to actually counterfeit paper shares

Reply to Crewleader (Original post)

Tue Sep 23, 2014, 12:15 AM

Sep 2014

to try and pull something like that off in say the 60's. Back when a courier actually had to go take delivery of the shares you bought and bring them to you before you could sell them. Much of that and you would have been caught and locked up.

westerebus

(2,976 posts)

2. Ms. Yellen has me worried.

Reply to Crewleader (Original post)

Tue Sep 23, 2014, 05:27 PM

Sep 2014

I don't believe for an instant the FED is interested in a strong dollar. This administration has never been either. Not with reinstating the Bernank and the money helicopter as proof.

So in the crystal ball what do you think they see? At best the economy is malaise stricken and that's being optimistic. The stock market is afloat on the liquidity of QE like a beach ball sitting atop an above ground pool waiting for a smack into the driveway of suburban misfortune. It has to happen. If for no other reason the pool has yet to be cleaned of the slime living on its edges. The first thing to go is the beach ball. Same as it ever was.

So what is so tempting at this point in time? Possibility one, they can, so they will. Possibility two, they are deflating cash on the side lines that is hedged in metals and such. Possibility three, they are simply screwing with the BRIC's as they attempt to set a BRIC bank in place. The bonus with that is, it screws Mr Putin and company without officially doing so. Possibility four, the writing is on the wall just above our heads in the darkness. No one saw it coming.

Possibility five, why Ms. Yellen worries me, it's all the above, plus a pre-depression debasement of metals as a way to derail any possibility that metals could surpass their historic highs until the miners are in the hands of friends of the bank cartels. It's not confiscation if production is controlled and importation is taxed.

The you may think me slightly off center. Well more so. What ever. The up side is those who have and hold can expect the next swing upward, a function of counter market disparity as the balloon goes sailing by will be to the top end of the historic charts. After that, it's fiat by debit card/cell phone and cash goes the way of rotary phones.

You may now resume regular programing and return any usable aluminum foil to its residence.

Crewleader

(17,005 posts)

3. Hi westerebus

Reply to westerebus (Reply #2)

Tue Sep 23, 2014, 08:57 PM

Sep 2014

westerebus

(2,976 posts)

4. good morning..

Reply to Crewleader (Reply #3)

Wed Sep 24, 2014, 03:24 AM

Sep 2014

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